Child Identity Theft: Risk Patterns and Protection

June 6, 2018

In 2017, over 1 million minors had their identity data compromised. To put that number into perspective, for every 100 kids in the U.S., one or two have had their information used as a tool of fraud. The price tag of those crimes totaled $2.6 billion.

When you think of identity theft, it's natural to consider the crime as something primarily targeting adults. However, your kids are still in danger of having their identities stolen. Scams can involve all kinds of personal information, and kids are often targets of opportunity. Personal information stolen today may go undetected for years, as there's little reason for parents or guardians to check up on it until it's too late.

According to a 2018 Child Identity Fraud Survey from Javelin, sponsored by Identity Guard, it's now more important than ever for parents and guardians to be aware of all the ways that criminals try to steal kids' personal data.

Patterns of Risk

The Javelin Child Identity Fraud study revealed that financial crimes targeting children tend to expand over time. First, criminals will open a few accounts with a stolen Social Security number. Then they'll leverage those accounts to create more registrations and expand the lines of credit for their bogus identities. After that, they simply cash out.

According to the study, banks and credit bureaus are where the financial part of fraud takes place. Once such crimes are uncovered, these institutions represent parents' best chance to resolve identity fraud issues related to their kids. 

In 2017, over 1 million minors had their identity data compromised. To put that number into perspective, for every 100 kids in the U.S., one or two have had their information used as a tool  of fraud. The price tag of those crimes totaled $2.6 billion. Many of those cases involved new account fraud, where thieves took advantage of the fact that children's Social Security numbers weren't yet associated with bank accounts. Fraudsters will open new lines of credit with the child’s information, spend the money and leave the victims to deal with the consequences.

One of the most worrying risk patterns involving kids' Social Security numbers and other personally identifiable information involves high rates of fraud perpetrated by family members who have legitimate access to their accounts. Since there is no hacking or data breach involved in such crimes, they are difficult to stop, detect or respond to.

Parents must be extremely diligent to deal with them. By a similar token, guardians should keep an eye on physical documentation, operating under the assumption that identity theft today takes place online could lead to papers with essential information falling into the hands of criminals. Wide-spread sharing copies of a birth certificate or a Social Security card could lead to theft.

Sometimes, parents may ignore alerts that a child's personal information has been used for devious purposes. After all, receiving a bank account notification for an infant seems nonsensical - or may lead to the assumption that the warning is itself part of a scam. But when a child's data has been used to commit financial crimes, that may lead to account information being mailed out. The report urges parents to investigate such warning signs before conditions get worse.

Unusual Venues for Identity Theft

The potential consequences of identity theft targeting children, and that these crimes often go undetected for so long, means that parents must be especially cautious and vigilant. Bloomberg spoke with Kroll Inc.'s Brian Lapidus and Alan Brill about ways in which children's data is being stolen or used for criminal purposes. Sometimes, identity theft can involve medical information, with one child's data used to get care for someone else. Furthermore, job fairs targeted at teenagers can serve as places for fraudsters to acquire unused Social Security numbers by masquerading as a legitimate company and using bogus work applications.

Preparation and Monitoring

There is a need to monitor identities and information for improper use, even if that content is associated with a child too young to have a line of credit, loans or another kind of financial account. Considering the complicated ways that criminals can employ stolen data, and the potential complications of letting crimes go undetected for years, parents and guardians shouldn't wait to guard kids' identities. 

Get Identity Guard today to help build the protection your child needs to put a barrier between kids' vital data and fraudsters' dangerous schemes. By leveraging IBM Watson technology, Identity Guard can help you identify and protect against certain risk factors that could affect your child's identity. Enroll today!

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